An integrated product policy decision framework

Abstract

Purpose – The purpose of this paper is to formulate an integrated product policy (IPP) framework for the Republic of Macedonia, taking into account unique circumstances faced by the country, particularly the mandatory transposition of European Union (EU) environmental legislation, limited country-specific data availability and the low level of environmental awareness. Design/methodology/approach – The proposed IPP indicators at EU level and the available indicators in Macedonian conditions were used in order to create a composite IPP index as a method of measurement of the level of IPP implementation in the country. Markov Decision Processes (MDPs) are used as a policy decision approach for IPP. The purpose is to evaluate what decisions (taken now and in the future) would lead to the best possible level of IPP implementation. The approach applicability for long-term policy planning is demonstrated using a simple numerical example. Findings – A stylized numerical example utilizing the composite IPP index and the MDP approach indicate that policy makers should focus not only on transposing the mandatory EU legislation related to IPP, but simultaneously work to raise public awareness of IPP and environmental issues, since this opens the door for more beneficial policy alternatives in the future. Considering the long-term consequences of actions taken in the present time should be an essential part of policy design, given the pervasive and long-term nature of the effects of IPP policy. It is also very important to revisit the assumptions at regular intervals and incorporate into this framework the new learning and data obtained with time. Originality/value – This IPP framework and quantitative policy decision approach, in spite of its limitations, is a valuable and informative guide for IPP policy makers in the Republic of Macedonia. By incorporating a long-term view, explicit measurement of progress towards IPP implementation and the consideration of possible future consequences of policy decisions made in the present, it should be possible to significantly increase the likelihood of successful IPP implementation and improve environmental outcomes than those obtained using more conventional approaches.